Why We Need the Minimum Wage

At my job I have a coworker who is my age, 24 years old. She emigrated from the Congo when she was 17 and has been working full time with my employer ever since. She conducts her job entirely in English, the fifth language she learned how to speak. The job is stressful, her commute is long, and it is almost midnight when her shift ends. Not only does she work full time but she goes to school full time as well. Though we are the same age stress lines have already started to form in her face, drilled in by years of over work and exhaustion. She barely breaks even every month.

The thing to take away from that story is that poor people are poor because they’re lazy.

I thought I would just make three (I hope) worthwhile points on the minimum wage. The first is that a person simply cannot survive in any major US city working full time on minimum wage. Living in New York City I can safely that nobody can exist here on less than $10/hour. You might say that the homeless do that but like every New Yorker I pretend the homeless don’t exist.

Steel Reserve: The best alcohol money people give you on the subway can buy

The workers in the US who are currently living on minimum wage are only barely able to do so because of government allowances like food stamps, tax credits, Medicaid, etc. Essentially we provide a government subsidy for firms to underpay their workers. Which would be as ridiculous as providing a government subsidy to firms for destroying the economy. Isn’t it unfair to put this burden on taxpayers? Shouldn’t companies simply be required to provide a full time employee with enough money to survive?

The second point is that globalization has made it so that labor has less bargaining power now than at any time in the last one hundred years. In economics we talk about labor vs. capital (money). Today vast amounts of money can travel anywhere in the world in less than a second. Money has assumed abilities formerly only possessed by Goku at the end of the Frieza Saga.

Labor remains far more limited for mobility and is simply in a terrible position to bargain for wages because capital can always go find other labor elsewhere willing to do it for cheaper. We see this in the near death of unions in the US, organizations that used to be bulwarks in ensuring that workers received a fair share of a firm’s profits. Minimum wage laws act as one large labor union for workers at the bottom of the chain and they even manage to do it without organized crime connections.

And the last point is that profit maximization for shareholders has become the motto for far too many companies and it is nothing short of a cultural disease. Employees are just as valuable, really more valuable, than shareholders for the well being of a company. If you could pay your employees just a little more and in turn have your shareholders get just a little less, isn’t it worth doing if the employees need that extra dollar more?

A few days ago workers at McDonald’s and several other fast food places walked off the job in protest for higher wages. Let’s help them. Let’s make millions of lives better and get a federal minimum wage of $10/hour indexed to inflation every year after. And maybe if we did that the next time you see a McDonald’s employee smile it won’t just be because they’re an actor playing one in a commercial.